ExxonMobil ( XOM) is one of the half- dozen major oil companies in the world. The firm has four primary operating divisions ( upstream, downstream, chemical, and global services) as well as a number of operating companies that it has acquired over the years. A recent major acquisition was XTO Energy, which was acquired in 2009 for $ 41 billion. The XTO acquisition gave ExxonMobil a significant presence in the development of domestic unconventional natural gas resources, includ-ing the development of shale gas formations, which was booming at the time. Assume that you have just been hired to be an analyst working for ExxonMobil’s chief financial officer. Your first assignment was to look into the proper cost of capital for use in making corporate investments across the company’s many business units.

a. Would you recommend that ExxonMobil use a single company- wide cost of capital for analyzing capital expenditures in all its business units? Why or why not?

b. If you were to evaluate divisional costs of capital, how would you go about estimating these costs of capital for ExxonMobil? Discuss how you would approach the problem in terms of how you would evaluate the weights to use for various sources of capital as well as how you would estimate the costs of individual sources of capital for each division.

600-750 words in length not including reference page, at least two scholarly journal references

Identify and briefly discuss the key issue(s) in the case. What was the ethical dilemma faced by Beth Sullivan?Do you think Beth acted ethically? Why or why not? Are there any other alternative courses of action possible for Beth?

Your answers to the questions should be specific, well-reasoned and supported by appropriate evidence. Do not just quote from the case.

Your response (one to two pages long, single spaced, Arial 10 or Times New Roman 12 font)

Roger McDaniels sat in front of his computer pondering his immediate future. He had just finished an impromptu meeting with Beth Sullivan from the internal audit department and his confidence was shaken. Both Roger and Beth left the meeting wondering if their recent decisions were for the best.
Roger’s accounting career began approximately ten years ago when he became a CPA. Over the last decade, Roger had been successfully employed in a variety of accounting positions. It therefore came as no surprise to Roger when three months ago, he was contacted by an executive recruiter and offered the CFO position at Solodor Pharmaceuticals (SP). SP’s mission was to conduct tests on Celenza, a new drug that had been developed to fight acute lymphoblastic leukemia. If successful, Celenza had the potential to increase the average life expectancy of affected patients by up to six years. Celenza offered terminal patients the most hope of any drug in over a decade. Although not stated publically, it was known in the industry that other pharmaceutical companies did not want to incur the significant costs associated with developing a similar drug because sales of a new drug would merely cannibalize sales from their current, but less effective medications.
Upon accepting the employment offer from SP, Roger felt very exhilarated. If SP’s mission was successful, not only would Roger be handsomely rewarded (as his compensation package provided him with numerous stock options, which in themselves would likely make Roger a millionaire), but Roger would also play a part in extending the lives of numerous terminally ill patients. Given the history of death in his family from various forms of cancer, more specifically the death of his father from leukemia when he was only a child, Roger was all too aware of the pain and mental anguish associated with terminal illnesses.
Upon starting his new position, Roger was not surprised to learn that, similar to other new pharmaceutical companies, SP was currently experiencing severe cash flow problems. Thus, the immediate priority for Roger was to procure a round of additional equity financing. If Celenza was shown to be successful, it had the potential to be a cash cow. However, in its current state, SP had no expectations of any Celenza sales occurring for at least two more years because extensive testing was needed before the FDA’s Center for Drug Evaluation and Research would even consider approving the drug. Without obtaining a minimum of $5,500,000, SP would run out of money and be forced to liquidate within the next four months. This would not only leave Roger unemployed but would make his stock options worthless. It would also put Celenza’s future in jeopardy.

1. Suppose a condo generates $19,000 in cash flows in the first year. If the cash flows grow at 5% per year, the interest rate is 10%, and the building will be torn down in 25 years (the building is worthless after 25 years), what is the most you would pay for the condo today? Enter your response below (rounded to 2 decimal places).

2. You are planning for your retirement in 30 years. At that time you want to have saved $6,500,000. How much do you need to save each half-year for the next 30 years if the interest rate on your investment will be 6% per year (APR)? Enter your response below (rounded to 2 decimal places).

3. An investment promises to pay you $8,000 per year starting in 5 years. The cash flow from the investment is expected to increase by 1% per year forever. If alternative investments of similar risk earn a return of 8% per year, determine the maximum you would be willing to pay for this investment today. Enter your response below (rounded to 2 decimal places).

4. Consider the following bond where the coupons are paid semi-annually,

Bond CIBC

Price $996.25

YTM 10%

Years to maturity 15 years

What is the coupon rate of this bond? Enter your answer as a percentage. Enter your answer to 2 DECIMAL PLACES.

5. What are the coupon payments given a current yield of 11.8% and a price of 990.5? Enter your answer to 2 DECIMAL PLACES.

6. What is the price of a bond with a coupon rate of 6%, payable annually, a face value of $1000, 13 years to maturity, and a yield to maturity of 6.2%? Enter your answer to 2 DECIMAL PLACES.

The Manson Company completed these transactions during January of the current year:

January 1, Began business by selling stock for $500,000.00.
January 1, Rented office space for 1 month using check number 800 for $10,000.00 to Smithlord Properties. (Example posted to cash disbursement journal).
January 2, Purchased office furniture and equipment on credit from Mckay Company, invoice mck66 dated January 9, terms 2/10, net 30, $20,499.11. (Example posted to purchases journal).
January 2, Sold merchandise on credit to John Nelson. Invoice No. 324, $7,965.37. (Terms for all credit sales are 2/10, n/30). (Example posted to sales journal).
January 3, Purchased on credit from Cosair Company office supplies, $1224.54, invoice xx12 dated January 3, due in 30 days. Supplies are expected to last for approximately 4 months.
January 3, Received merchandise and invoice F1 dated Jan 1, terms 2/10, n/30; from Farnswood Company, $213,022.22.
January 3, Sold merchandise on credit to Thomas Zak, Invoice no 325, $4,666.88.
January 10, Sent Farnswood Company Check no. 876 in payment of its January 1 invoice less the discount.
January 10, Sold merchandise on credit to Margo Edwards, Invoice no. 326, $8,375.21.
January 11. Sold merchandise on credit to Ken Duclose, Invoice no. 327, $5,554.23
January 12, Received payment from John Nelson for the January 2 sales less the discount check number 4444. (Example posted to cash receipts journal).
January 13, Received payment from Thomas Zak for the January 3 sales less the discount check number 12345.
January 15, Issued check no. 877 payable to payroll, in payment of sales salaries for the first half of the month, $7,950.00. Cashed the check and paid the employees.
January 15, Cash sales for the first half of the month were $77,341.22. (Normally cash sales are posted daily, but for the purposes of this problem you are going to post them all at once.)
January 19, Received payment from Margo Edwards for the sale of January 10 less the discount check number 8888.
January 20, Received merchandise and invoice F2 dated Jan 19, terms 2/10, n/30; from Farnswood Company, $113,044.44.
January 27, Sold merchandise on credit to Margo Edwards, Invoice no. 328, $6,458.22
January 28, Sold merchandise on credit to Thomas Zak, Invoice no 329, $26,544.11.
January 29, Sold merchandise on credit to Heather Terry, Invoice no 330, $11,123.45.
January 31, Issued check no. 879 payable to payroll, in payment of sales salaries for the second half of the month, $7,950.00. Cashed the check and paid the employees.
January 31, Cash sales for the second half of the month were $72,345.00. (Normally cash sales are posted daily, but for the purposes of this problem, you are going to post them all at once.)
January 31, Paid for utilities (water, power, etc) to Unified Utilities Inc. $1,454.77 check number 880.
January 31, Paid for advertising from AdsRus for January $10,500.00 check number 881
January 31, Estimated the expected life of the office furniture and equipment to be 5 years with no salvage value. Manson Company will take a full month of straight-line depreciation in January.
January 31, Counted ending inventory valued at $ 196,312.00.
January 31, Counted office supplies and determined that approximately $750.00 worth of supplies were left and that the rest had been used in January.

1) Enter transactions to the appropriate journals (Sales, Purchases, Cash Receipts, Cash Disbursements or General Journal). An example is shown for each special journal.2) Post to the appropriate subledgers and general ledger accounts.3) Prepare a trial balance4) Prepare an income statement5) Prepare a balance sheet.6) Prepare schedules of AR and AP to test the accuracy of the subledgers

Top Performance Cell Phones sold $18,000 of merchandise on credit Andrew Trucking Company. Andrew had some bad times and only paid $ 4,000 of the receivable. After repeated attempts to collect, Top Performance finally canceled accounts receivable Andrew. Top Performance six months after he received the check for $ 14,000 Andrew, with a note of apology for the delay of payment.

Required

1. Make the following journal entries for Top Performance:a. Credit sale, $ 18,000. (Ignore the cost of goods sold)b. Payment of $ 4,000 to account (which was a credit)c. Canceling the remaining portion of the receivable from Andrew. Top Performance uses the method of provision for uncollectible accountsd. Repayment of the receivable Andrewe. Andrew charging total, $ 14,0002. Get Top Performance accrue accounts receivable on its balance sheet, after they have transferred all seats.

Required
1. To journal sales, collections, bad debt expense using the method of provisions (sales percentage method) and cancellation of uncollectible accounts during October 2011.
2. Prepare accounts-T to show the ending balances in Accounts Receivable and Allowance for Doubtful Accounts. Calculate the net accounts receivable to 31 October. What amount expected to be collected Flag Mountain?
3. Show how Flag Mountain report Accounts receivable on its balance sheet as of October 31, 2011.

As of December 31, 2016, the balance of accounts receivable Electric Energy Manufacturing is $ 170,000. The provision for doubtful accounts have a credit balance of $ 10,100. Electric Energy Manufacturing prepares the next aging report for your accounts receivable:
Age of accounts
——————————
1 a 30 31 a 60 61 a 90 More than 90
Accounts Receivable days days days days
——————————————————————————————————
$170,000 $70,000 $50,000 $30,000 $20,000
Estimated Uncollectible Percentage 0.6% 3.0% 9.0% 40.0%

Required

1. to journal the adjusting end of the year for doubtful accounts based on the aging report. Show account-T for Allowance for doubtful accounts as of December 31, 2016.2. Show how Solar Energy Manufacturing Accounts Receivable report on its balance sheet as of December 31, 2016.

Q16-2: A company’s annual sales budget is for 120,000 units, spread equally through the year. It needs to have one and three quarter’s month stock at the end of each month. If opening stock is 12,000 units, what are the number of units to be produced in the first month of the budget year?

Q16-3: The standard costs for a manufacturing business are £12 per unit for direct materials, £8 per unit for direct labour and £5 per unit for manufacturing overhead. The sales projection is for 5,000 units, 3,500 units need to be in stock at the end of the period and 1,500 units are in stock at the beginning of the period. What will the production budget show in costs for that period?

Q16-4: Receivable increase by £15,000 and payables increase by £11,000. What is the effect on cash flow from the Statement of Cash Flow from these two items?

Q16-5: Randy Airplanes Ltd is a privately owned business. It has budgeted for profits (after deducting depreciation of £41,000) of £150,000. Debtors are expected to increase by £20,000, inventory is planned to increase by £5,000 and creditors should increase by £8,000. Capital expenditure is planned of £50,000, income tax of £35,000 has to be paid and loan repayments are due totaling £25,000. What is the forecast cash position of Randy’s at the end of the budget year, assuming a current bank overdraft of £15,000?

Q17-2: A company has budgeted for materials of £170,000 but the actual costs are £164,000. The company has also budgeted for labour of £130,000 with actual costs being £133,000. What is the expense variance and is it favorable or adverse?

Q18-2: Trans PLC estimates that a new product will sell in sufficient quantities to justify its manufacture at a selling price of £175. The company needs to invest £5 million to produce a quantity of 10,000 of these new products per year and requires a return on that investment of 12% per annum. The current prediction is that the product will cost £140 to manufacture. How should Trans reengineer its costs to achieve the target selling price and target rate of return?

Q18-3: SkinTan’s top five customers generate sales revenue of £950,000 per annum. Each generates a different gross margin as a consequence of price negotiations that have been carried out over several years. Because of their location, each customer incurs different distribution expenses. Sales commissions are paid at the rate of 6% on all sales. Fixed costs are customer specific, covering salaries of sales and office staff who service each customer. The following table shows the information for each of the top customers for the previous year.

Case Facts:1. Bonanza Drink Co. is a beverage company located in Napa Valley. Bonanza Drink Co. began its operations in 2003.2. Bonanza Drink Co.’s only product is a Napa Chardonnay wine.3. Bonanza Drink Co. sells its product to specialty grocery stores.4. Bonanza Drink Co. rents its production facility.5. In 2003, Bonanza Drink Co. sold directly to selected grocery stores. Since 2004, Bonanza Drink Co. has sold its products through a distributor.6. Bonanza Drink Co. purchases Napa Valley Chardonnay grapes every year from The Grape Guys.7. Bonanza Drink Co. had a contract to purchase 1,500 tons of Chardonnay grapes from The Grape Guys’ 2008 harvest at $2,100 per ton. The Grape Guys only delivered 350 tons of grapes.8. 2008 was a high demand and low harvest year for Chardonnay grapes and Bonanza Drink Co. suspects that The Grape Guys may have sold the grapes due Bonanza Drink Co. to a higher bidder.9. Bonanza Drink Co. planned on building its 2008 ending inventory to 625,000 bottles, as part of a strategy to age the wine and sell it at a premium. Bonanza Drink Co. expected to sell the wine at $15 per bottle in 2011. Instead, Bonanza Drink Co. sold a portion of that stock to minimize its 2008 losses. Additional storage costs of the wine would have added $355,000 per year to operating costs beginning in 2008.10. Despite its best efforts, Bonanza Drink Co. was unable to acquire replacement grapes.11. Bonanza Drink Co. has sued The Grape Guys for breach of contract.12. Please see Excel file for other Bonanza Drink Co. financial data.

Assignment:
You have been engaged by counsel for Bonanza Drink Co. to prepare a Rule 26 expert report on damages. Your report should address the following areas:1. Your assignment2. Your qualifications3. Compensation4. Information considered5. Opinions*6. Basis of opinions7. Exhibits, if any

* You have discussed this assignment with your mentor, and together you have identified the following important considerations that must be addressed in order to arrive at the opinions in your report. Therefore, in addition to the Rule 26 report, the deliverables for your final exam will include the answers to the questions below (it’s an important part of your grade!). Please answer each question in an organized manner (no unformatted excel schedules please!). When preparing your report, remember that where you address these considerations in your opinions, you should discuss the points as part of an organized narrative (please don’t copy and paste the Q&A into your report).

1. Bonanza Drink Co. has done its best to mitigate damages. How so? How does one reconcile that with the facts that profits in 2008 were close to $0 though inventory was year-end inventory was still 225,000 bottles?2. Which fiscal year’s sales were impacted? What portion of the current year’s production is sold during the current year versus the following year, given that Bonanza Drink Co. uses the FIFO approach for its inventory?3. Historically, what was the yield per ton (i.e. how many bottles per ton of grapes)?4. How many bottles could have been produced with the undelivered grapes?5. What would have been Bonanza Drink Co.’ selling price per bottle (for the bottles produced from the undelivered grapes)? Calculate the total lost sales.6. What would have been the cost of sales per bottle? What are the components of the cost of sales? Are those components variable or fixed costs? And why (discuss the evidence)? What were the historical costs of sales percentages? Calculate the total cost of sales related to the lost sales.7. Identify operating expenses that are variable. Which ones are they? Why? Estimate the total operating expenses that were saved.8. What are the lost revenue and avoided costs associated with Bonanza Drink Co. foregoing the aging of its product to sell at a higher price in 2012.9. Concludes as to lost profits due to the alleged breach of contract.

Assume that the low-calorie frozen, microwavable food company wants to expand and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients.

Write a seven to eight (7-8) page paper

1. Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response.

2. Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.

3. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response.

4. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.

5. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.

6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.